Like marathons, every deal's path and pace are different

Rebecca Lynn White is a director in Western Reserve Partners' Industrial Group. She focuses on mergers and acquisitions, capital raising and bankruptcy and restructuring transactions.

As a participant in the 117th running of the Boston Marathon last week, my thoughts and prayers are with each of the 27,000 runners, their families, the spectators, volunteers and emergency responders affected by the events that unfolded on Marathon Monday. We runners are strong, though, and will persevere for the spirit of our sport and the legacy of the Boston Marathon.Earlier this month, I completed my 22nd marathon. Each time I run a marathon it is a different experience, depending on the course, my training, the weather and the other runners. However, I have trained my body to run 26.2 miles and know what it takes to get to the finish line. Similarly, although each merger and acquisition transaction is unique (depending on the management team, industry, market conditions, etc.), I have been through the process enough times to get a good feel for the course and how to foresee and manage the potential hazards along the way.

In both running a marathon and in selling a business, it is important to:Hydrate properly: Continue to operate your business. Hire experienced advisers in whom you have comfort to run the process so your management team and you can continue to run the business. You don't want the company's earnings (and your deal value) to dehydrate during the process.I have worked on numerous transactions where the company's earnings slide, which usually results in a purchase price renegotiation — not good news for the seller. However, this past fall, I worked with a client that was experiencing phenomenal growth during the sale process. The management team remained focused on running the business and introducing several new products post-letter of intent, which required the purchase of new equipment and the leasing of more manufacturing space. In this instance, we were actually able to renegotiate a higher purchase price for the seller and reimbursement for the capital expenditures related to the new business.Maintain a steady pace: Although it can be exciting at the beginning, be careful not to rush the early stages of the process. Ensure that your management team and advisers are properly trained and fully ready to begin the race. Starting out too fast usually results in “hitting the wall” later.

At the end of the third quarter last year, we were approached by several sellers that wanted to get a deal done by the end of the year for tax purposes. This left us three months to approach the market, find a suitable buyer, negotiate a favorable transaction and close. This is all achievable. However, buyers' diligence processes have become more detailed and in-depth, which has significantly increased the time the sell-side process takes. While there are ways to quicken the pace, the best thing to do is to start the process now if you are planning to sell by year-end so you have ample time.Navigate the terrain: Discuss potential deal hazards with your advisers early in the process and collectively determine how to navigate them. Be prepared to address issues that may arise during diligence, such as financial and environmental issues. Also, discuss how to manage anxious employees and customers, as well as buyers who try to renegotiate a deal. Being prepared for those uphills in miles 16 through 20 gives you more confidence and increases your chances for a better race.We are working with a client with multiple international subsidiaries with different fiscal year-ends. Although the company has audited financials, we knew that buyers were going to need extra support to get comfortable with the company's consolidated financial statements. As a result, our client commissioned a sell-side financial diligence report upon which the buyers relied, which sped up their diligence process.Stay mentally focused: The sell-side process can be extremely demanding and emotionally taxing. It can seem as though buyers and their advisers are criticizing every aspect of the business you created.Often, business owners will get “seller's remorse” late in a process. Steve Jobs once said, “There are times when you run a marathon and you wonder, why am I doing this? But you take a drink of water, and around the next bend, you get your wind back, remember the finish line, and keep going.” At times like these, it is important to stay mentally tough and push your way through the finish line, where you will be rewarded for all of your hard work. Running a marathon (or selling a business) is no easy task, but with the proper training, support and mental toughness, it is achievable and rewarding. After months of hard work, there is nothing that can describe the pure exhilaration of the moment when you cross the finish line.

Morning Roundup

Business headlines from Crain's Cleveland Business and other Ohio newspapers — delivered FREE to your inbox every morning. Sign up for the Morning Newsletter.